Happy -778th anniversary, baby

It was a year ago today that the Dow fell 777.68 points in reaction to the House rejecting version 1.0 of the bank bailout plan.

That was the biggest point drop ever, although in percentage terms it didn’t even make the top 10. It was also, in retrospect, a reasonable (if a bit sudden) reassessment of the prospects for corporate earnings. Even now, after a months-long bull market, we’re still not back at the level (10, 365) the Dow closed at after that 778-point drop.

The market panic last fall was in debt securities and overnight bank loans. The stock market, it appears, was behaving pretty rationally.